Banking Sector Embraces Multi-Cloud

The financial services sector tends to be a bellwether for early adoption of disruptive technologies. For example, financial services giant Goldman Sachs played a key role in forging an application container specification in 2015 as the transformative framework was just gathering momentum.

A new study commissioned by software vendor Canonical and released this week finds that the financial services sector is now embracing multiple cloud deployments and accompanying components ranging from machine learning to containers. Among the motivations are better availability of cloud services, improved application performance and the ability to comply with financial regulations by isolating customer data in portable, ephemeral containers.

The report compiled by 451 Research found that 60 percent of North America, European, Middle Eastern and African financial services businesses expect to adopt multi-cloud IT architectures over the next two years. Most see multi-cloud as a platform for better application performance while boosting IT availability in a sector that can ill-afford downtime.

AI and machine learning are among the top technologies expected to be rolled by out by the financial sector, accounting for 36 percent of those surveyed. Containers (29 percent) and blockchain (24 percent) are also on IT managers’ radar screens.

As multi-cloud deployments ramp up in the banking sector, so too do concerns about skill shortages. Hence, vendors like Canonical are promoting automation tools such as its flagship distribution of the Ubuntu open source operating system and managed services such as its OpenStack and Kubernetes cluster orchestrator.

OpenStack promoters such as Canonical and Red Hat (NYSE: RHT) assert their distributions of the cloud computing platform are advancing the shift to multi-cloud infrastructure. OpenStack “in conjunction with a competitive public cloud represent a clear transition path to multi-cloud” for the financial industry, the report concluded.

Security was an early concern as containers transitioned to production. The market researcher found “container-driven portability is required for financial services businesses, where different workloads may need isolation if containing sensitive customer data or intellectual property.”

Hence, 43 percent of those surveyed expect multi-cloud deployments will help banks satisfy “granular [regulatory] compliance and security requirements.” Moreover, 41 percent said multiple clouds would help them to reduce the overall cloud deployment costs through savings from datacenter consolidation.

“The next few years will bring critical changes, including a major shift toward execution on cloud platforms,” said Liam Eagle, cloud research manager at 451 Research. “Executing on transformation in the finance sector means tackling challenges such as regulatory compliance and information security.

“We expect hybrid IT strategies and partner-led managed services to be key elements in overcoming those obstacles,” Eagle added.

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).